CIGARETTE group British American Tobacco unsettled investors after revealing sales volumes were running below forecasts.

The Lucky Strike-to-Dunhill group, which employs more than 600 staff in Darlington, first said in December volumes were likely to be two to three per cent lower this year as smokers switched to cheaper brands in light of the global economic slump.

A move to clamp down on contraband was also forecast to affect sales - BAT refuses to supply customers if the group thinks they are asking for more cigarettes than they can sell.

But addressing shareholders at yesterday's annual meeting, chairman Martin Broughton said volumes were currently running "a little below expectations".

BAT also used the AGM to hit out at the World Trade Organisation, which is drawing up a proposed framework convention on tobacco control.